Non-oil Continues To Under-perform, As Oil Lifts Nigeria’s 2017 GDP To 0.83%

In what shows the compelling need to fast-track the diversification of Nigeria’s economy and free it from the vagaries of the oil sector, the 2017Q4 data for the Gross Domestic Product (GDP) revealed that the economy grew by 1.92%, from -1.73% and 1.4% in the 2017Q3, still driven by the sector, which contributes up to 75% of federally collected revenue.
According to data released by the National Bureau of Statistics (NBS) on Tuesday, the Q4 numbers helped 2017 full-year GDP to a 0.83% growth, 2.42% better when compared to the 1.58% contraction in 2016. Real non-oil GDP growth for the year stood at 0.47%, as Q4 recorded 1.45%, up from 0.76% in the 2017Q3; while oil GDP for the period climbed by 4.79%, after soaring by 8.48% in 2017Q4, which was slower than the 25.89% achieved in the prior quarter.
Reacting to the numbers, analysts at Cordros Capital noted that “the growth estimate came in 8 basis points and 34 bps lower than Bloomberg’s compiled average estimate of 2.0% and Cordros forecast of 2.26%. For the full year, real GDP was 0.83% in 2017, compared to -1.58% in 2016.”
The Q4 non-oil sector growth was driven mainly by agriculture (crop), trade and transportation and storage.
Real Q4 year-on-year growth in oil GDP stood at 8.38%, representing 26.08% relative to rate recorded in the corresponding period of 2016, just as growth reduced by -17.5%, as against -25.89% in Q3.
The annual growth of the oil sector stood at 4.79%, up from previous year’s -14.45%; just as it contributed 8.17% of total real GDP in 2017Q4.
On an annual basis, the oil sector grew by 4.79%, compared to the previous -14.45%, just as it contributed 7.17% of total real GDP in 2017Q4, as against the 6.75% and 10.04% contributed in the corresponding period of 2016 and preceding quarter of 2017.
Quarter-on-quarter, real GDP growth was 4.29%, with an aggregate N31.58tr in nominal terms higher when compared to N29.169tr in Q4 2016, resulting in a Nominal GDP growth of 6.99%. Real GDP in 2017Q4 stood at N18.79tr
“This growth is lower relative to growth recorded in Q4 2016 at 12.49%. Nominally, 2017 recorded an annual growth rate of 12.05% higher by 4.25% compared to 2016 annual growth of 7.80%. The broad classification into the oil and non-oil sectors will give a clearer depiction of the Nigerian economy,” the NBS noted.
Meanwhile, oil production averaged 1.91 million barrels per day, down from 2.03mbpd in Q3; which was lower than the 2.05mbpd achieved in 2016Q1.
A breakdown of the real sector contribution to 2017Q4 GDP showed that services contributed the lion’s share of 53.45%; followed by the agriculture sector with 26.18%; while industries recorded 20.38%.